Gilbert Cette, Jimmy Lopez, Jacques Mairesse, 04 November 2016

With structural reforms of labour markets currently being considered in several countries, including in southern Europe, assessing their impact is vital. This column investigates the effects of employment protection legislation on a variety of production factors. Structural reforms that increase labour flexibility – that is, which weaken employment protection legislation – could have a favourable impact on firms’ R&D investment and their hiring of low-skilled workers.

Juan Dolado, 09 February 2015

Youth unemployment has been a problem in Europe for several decades, but some European countries have fared much better than others in recent years. This column summarises the policy lessons to be drawn from a new eBook that compares the labour market experiences of different European countries and provides an early evaluation of the European Commission’s Youth Guarantee scheme.

Antonio Cabrales, Juan Dolado, Ricardo Mora, 05 December 2014

The negative consequences of dual labour markets have been extensively documented, but so far little attention has been paid to their effects on workers’ on-the-job training and cognitive skills. This column discusses evidence from PIAAC – an exam for adults designed by the OECD in 2013. Temporary contracts are associated with a reduction of 8–16 percentage points in the probability of receiving on-the-job training, and this training gap can explain up to half of the gap in numeracy scores between permanent and temporary workers.

Samuel Bentolila, Pierre Cahuc, Juan Dolado, Thomas Le Barbanchon, 22 January 2011

Since the global crisis, unemployment in Spain has soared to 20%, double the EU average. This column compares Spanish unemployment with that of France and argues that differences in employment protection legislation account for nearly half of the dramatic rise in unemployment in Spain. Its findings add further support to calls for a single labour contract in the country.

Marco Leonardi, Giovanni Pica, Julián Messina, 04 March 2010

How do financial crises alter the effects of employment protection legislation? This column argues that firms with insufficient access to credit are even less able to rationalise their costs by switching from labour to capital – reinforcing the negative effects on productivity. But policymakers should also consider that, in countries with less-developed financial markets, employment protection provides insurance against labour-market risk.

Winfried Koeniger , Julien Prat, 29 August 2007

Recent empirical research shows that EPL has quite different effects across worker and firm types. Low-skilled workers bear most of the adverse consequences of EPL, and it drives small or less efficient firms out of the market. Reformers of EPL should take account of these differences, especially the interactions with product and financial market structure.


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